BUMKT5902 Marketing Management: Applying Porter’s Five Forces

This marketing management report applies Porter's Five Forces framework to analyze the competitive landscape of an industry, likely the cosmetic industry based on the provided text. It assesses the threat of new entrants, bargaining power of consumers and suppliers, the threat of competitors, and the threat of substitute products. The analysis suggests that the threat of new entrants is low due to high capital requirements and regulatory frameworks, consumer bargaining power is high due to limited companies offering similar services, supplier bargaining power is low due to a large number of suppliers, the threat of competition is high due to the presence of established brands, and the threat of substitutes is high as consumers can find similar products in other industries. The report references various sources to support its analysis, including Applied Market Research, BrandZ, Morden, and Owler. Students can find similar solved assignments and past papers on Desklib.

MARKETING MANAGEMENT

Marketing Management 1
Porter’s Five Forces Framework
The threat of new entrants
The threat of new entrants is low just because of high capital requirement. It has been
seen that the high capital is required to establish the new business in the cosmetic industry.
The other low degree of threat of new entrants is existing regulatory frameworks. It is
observed that the existing frameworks create many challenges for the new entrants while
entering the market that is why; the cosmetic industry has low threat of new entrants
(Morden, 2016).
Bargaining power of consumer
It has been analysed that the bargaining power of consumer of cosmetic industry is high as
they have limited number of companies. There are limited companies in the cosmetic industry
that offers the similar nature of services to consumers. The companies provide the variety of
products to the consumers with the price strategy in order to attract the consumers towards
the services. As the limited number of companies provide similar nature of product with the
low prices due to which the consumers have many options to buy the product. There are some
companies that offer the various facilities to consumers that is why; the negotiation power of
consumers is high.
Bargaining power of Suppliers
It is observed that bargaining power of suppliers is high as there are large numbers of
market suppliers in the market. As discussed above, there are limited numbers of companies
in the industry who offers the similar nature of cosmetic products to consumers for their
protection. As there is limited number of companies in the industry and the large number of
suppliers in the industry due to which the switching cost is less (Applied Market Research,

Marketing Management 2
2018). The suppliers can easily switch the new suppliers as per the requirement of the
company. The suppliers offer the less amount of prices to companies in order to deliver the
large number of services and earning the high revenue. That is why; the negotiation power of
suppliers is low in the industry of Pantene.
The threat of competitors
The threat of competitors is high as there are limited numbers of companies in the
industry. The companies offer the similar nature of services to consumers with the different
strategy in order to attract the consumers. Loreal, Bioexpert, and many other companies also
have high brand image in the market due to which they compete with each other (Owler,
2018). The company implement the competitive price strategy in order to provide the services
to consumers. It is observed that the prices of the company are equal as its competitors’
prices. But it provides the quality of services in the limited prices in order to attract the
consumer towards the services.

Marketing Management 3
(Source: BrandZ, 2016)
The threat of substitute product
The threat of substitute product is high as the consumers can buy the product from the
different industry. It is observed that the other industries also offer the similar products with
the different ingredients in low prices such as beauty product industry. The competitors of the
company also provide the similar services to consumer in low prices in order to attract them
towards the services (Owler, 2018).

Marketing Management 4
References
Applied Market Research. (2018). Cosmetics Industry Overview. Retrieved from:
https://www.alliedmarketresearch.com/cosmetics-market
BrandZ. (2016). GLOBAL 2016: Changing shopping habits challenge brands to innovate.
Retrieved from: https://brandz.com/article/global-2016-changing-shopping-habits-
challenge-brands-to-innovate--1254
Morden, T. (2016). Principles of strategic management. Routledge.
Owler. (2018). Pantene's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. Retrieved from: https://www.owler.com/company/pantene